Welcome to my first installment of, “Would You Rather…?” Since this is my first time starting this new series, I thought I would explain how this process will work.
Each month, I will pose an interesting debate between two similarly priced items. I will pose the question to you, my readers, and ask for your valuable feedback. You will be asked to tell me two things:
- What you prefer out of the two choices
- Why you would choose that item over the other
One more ground rule. In order to make this a productive conversation, PLEASE stay on topic. If I ask you to choose between A and B, please don’t tell me that you would rather have C. It may be more realistic, but I think the conversation will benefit more if we stay on topic.
Why this is Worthwhile
I believe this will be a valuable way to start a conversation. Whether we realize it or not, I believe that we make these decisions, both consciously and subconsciously ALL THE TIME. We regularly choose to spend our money on one thing over another. When you are in the grocery store, you are forced to choose between store brand and name band. While some of it comes down to priorities, we often make these decisions without knowing why. I know that I have spent more money on one thing, only to wish I had my money back and could use it towards something more meaningful.
We Make These Choices Everyday
Sometimes, it’s not as easy of a choice as deciding between two options. When we go car shopping, for example, there are hundreds of different models, produced by tens of different makes. How do you decide which is best? Sometimes it comes down to just pure chance. You see a commercial and are persuaded to buy that car. I hope, however, it comes down to calculating what is important to you. If you are going to be financially successful, it starts with spending your money wisely.
We Can Help Each Other
That’s why I have started this new (fun) series. It will not only give you a chance to give your feedback, but also convince other people that you are right. Who doesn’t like a little debate every once in a while. I think the end result will be that we all learn from each other. We can help each other make smarter decisions with our money if we talk about our everyday expenses.
Would You Rather Buy a (Second) Car or Travel?
The first installment features a pretty basic household budgeting dilemma. It is one that my wife and I are forced to make over and over. We currently have one car, but we love to travel. I hate taking the train in the Winter, so I am tempted to buy a second car. Here’s the question:
Assuming the costs are basically the same, would you rather buy a second car or take an annual vacation to an exotic place?
Let’s expand this question a little bit before I open it up for debate.
Expenses of Car / Annual Vacation
Some of my observant readers would probably be quick to point out that a new or even used car is going to cost more than an annual family vacation. This is definitely true, but a car will last more than 1 year. My wife and I take decent annual vacations each year. We don’t stay in the nicest hotels or pay for expensive tours, but we still spend a good sum of money each year. If I had to average it out, I would estimate that a nice annual vacation for two (traveling by plane) will cost $2,000-$3,000 at minimum.
The prices of different cars will have different price tags. But that doesn’t mean we can’t find some figures to compare it to. When my wife and I bought our wagon in 2009, we paid just under $10,000 for it. We expect it to last us at least seven years (if not 10), without putting any significant amount of money into it (fingers crossed). Like anyone else who owns a car, we pay for maintenance on the car. For the past three years, we have probably spent $500 a year on maintenance issues (getting new tires, oil changes, minor repairs, etc.). If we assume that our car will last 7 years, that means our annual expenses are somewhere around $2000. (This is some fuzzy accounting, but for sake of simplicity, just go with me on this one).
For my situation, the annual expenses for buying a second car and taking a vacation are nearly the same. Sure, there would be additional costs like fuel costs, but I already incur public transportation costs, so I have ignored it. What that means is that if I can afford to do only one, I have to choose. And so do you!
It’s up for debate: What means more to you? Having the luxury of a car to drive to work? Or taking an annual vacation to see the world?
What’s NOT up for debate: Just as a friendly reminder, it’s not my intention to argue about the financials. I know that you could find a cheaper car, but you could also choose to find a cheaper vacation.
Readers, I want to hear from you!